JetBlue Updates Q4 Estimates With Boost From Election & Thanksgiving

JetBlue has upgraded its previous Q4 2024 and full-year estimates, with the airline citing higher-than-expected bookings in November and December, better revenue performance during the Thanksgiving travel period, and lower fuel prices.

Better-than-expected JetBlue revenue performance

The airline pointed out that booking performance in November and December was higher than expected immediately after the US Presidential election. As a result, the Q4 revenue headwind from the election was now estimated to be 0.5 points compared to the previous estimate of 1 point.

“Furthermore, improved close-in demand and strong operational performance over Thanksgiving week resulted in better revenue performance during the November holiday peak.”

In terms of travel in December, in-quarter bookings have exceeded expectations in both peak and off-peak travel periods, boosted by JetBlue’s 2024 revenue initiatives, which are expected to exceed $300 million of cumulative benefit in Q4.

Thus, its estimated Q4 capacity, measured in available seat miles (ASM), would be 6.5% to 4.5% lower year-on-year (YoY), while annual capacity would go down between 4% to 3%. Previously, the carrier predicted that its Q4 and 2024 capacity would be 7% to 4% and 4.5% to 2.5% lower YoY, respectively.

Meanwhile, Q4 revenue will be 5% to 2% lower YoY (previous estimate: 7% to 3%), while annual earnings would be 4.5% to 3.5% lower. Beforehand, the company expected its yearly revenue to lessen by 5% to 4%.

Cost performance

JetBlue added that non-fuel unit costs are also expected to improve compared to its previous guidance. That was a result of controllable cost benefits, which was a direct consequence of a more reliable and on-time operation.

Fuel prices have been lower than expected. Beforehand, JetBlue expected to spend $2.50 to $2.65 per gallon of fuel, with the latest update to its investors estimating the per-gallon price to be between $2.40 and $2.50.

Capital expenditure (CapEx), which is typically used to acquire aircraft and related items, such as engines, estimates have remained the same. The airline predicted that its CapEx in Q4 and 2024 would be $450 million and $1.6 billion, respectively.

In July, JetBlue revealed that it had agreed with Airbus to defer some aircraft deliveries. As a result, A321neo aircraft, which were scheduled for delivery between 2025 and 2029, were deferred to 2030 and beyond.

However, it has largely kept its A220-300 delivery schedule. At the time, the airline planned to take delivery of 12 A220-300s in Q3 and Q4 and 20 each in 2025 and 2026. The remaining 16 aircraft of the type would be delivered from 2027 to 2028 and beyond.

Ch-aviation data showed that in 2024, JetBlue has taken delivery of 14 A220-300, four A321neo, and 2 A321LR, a derivative of the A321neo. According to the site’s estimates, the carrier should welcome another six A220-300 and one A321neo.

The latter, registered as N2193J, should be delivered sometime in December. The A321neo operated its first flight on November 15, with another two flights occurring under its test registration D-AZXB on November 22 and December 3, according to Aviation Flights Group.

Airbus, which has already revised its aircraft delivery goal downward from 800 to “around” 770, had delivered 559 aircraft as of October 31, meaning that it would have to hand over “around” 211 aircraft in November and December to achieve its already-revised goal.

JetForwarding with its strategy

Nevertheless, JetBlue pointed out that it has continued to execute its JetForward strategy. The airline has already seen YoY on-time performance improvements in October and November through reliability investments, increasing customer satisfaction and reducing operating costs.

The carrier unveiled its JetForward strategy together with its Q2 results on July 30. Service, network, products and perks, and financial improvements are expected to deliver incremental earnings before interest and taxes (EBIT) benefits of between $800 million and $900 million from 2025 to 2027.

Ursula Hurley, the chief financial officer (CFO) of JetBlue, said at the time that while many JetForward initiatives will take time to ramp to their full potential, the strategy’s strong foundation should result in the aforementioned incremental EBIT benefits.

“We are setting ourselves on a path to restore our balance sheet health, and in support of securing our financial future, we are announcing an incremental aircraft deferral of approximately $3 billion of planned capital expenditures. Our focus going forward will be on driving value from our existing asset base and, ultimately, generating positive free cash flow.”

When it announced its Q3 results on October 29, which included the announcement of the evolution of its ‘Even More Space’ seat to ‘EvenMore’ that would be more akin to a true premium economy experience, Joanna Geraghty, the chief executive officer (CEO) of JetBlue, noted that the airline met or exceeded its quarterly financial targets.

Geraghty added that the airline also continued to implement the JetForward strategy, sustaining the momentum it had established in Q2, even if JetBlue, like other US carriers, was impacted by Hurricanes Helene and Milton.